Daily insights for CFD traders – French election upset sends EUR volatile

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Market Recap

Wall Street finished stronger on Friday, with the S&P 500 and Nasdaq hitting all-time highs, reflecting mixed signals from revised payroll data indicating US labor market weaknesses. The Dow Jones Industrial Average rose by 67.87 points (0.17%) to 39,375.87, the S&P 500 increased by 30.17 points (0.54%) to 5,567.19, and the Nasdaq Composite surged by 164.46 points (0.90%) to 18,352.76.

This morning, unexpected French election results revealed a likely win for the left New Populist Front, securing 180-205 seats, while Macron’s centrist group is projected to win 164-174 seats, with the far-right party significantly underperforming expectations, securing 120-130 seats. EUR closed last week at 1.0839, trading pre-market in a range of 1.0780 – 1.0800, and currently sits at 1.0796/1.0810.

The monthly US employment report showed mixed results, with headline employment rising by 206k (down from a negatively revised 218k) but exceeding expectations of 190k. However, two-month net revisions were -111k. The unemployment rate unexpectedly rose by 0.1% to 4.1%, with the participation rate also increasing by 0.1% to 62.6%, as anticipated. Average hourly earnings rose by 0.3% MoM and 3.9% YoY, matching expectations.

Day Ahead

This week presents several key events that investors will closely monitor, including Fed Chair Powell’s testimony before the Senate Banking Committee, US CPI inflation data, and an update from the Reserve Bank of New Zealand (RBNZ). Markets will also watch reactions to Sunday’s second round of French elections, which could result in a hung parliament. Chair Powell’s testimony to Congress will commence on Tuesday, with his prepared remarks and Q&A expected to provide insights into potential interest rate cuts.

Economic Data to Watch

  • JP – May Current Account Balance
  • JP – May Labor Cash Earnings y/y
  • AU – May Home Loans Value m/m
  • Germany – May Exports, Imports m/m
  • UK – BOE’s Haskel Speaks
  • US – June NY Fed 1-year Inflation Expectations
  • US – May Consumer Credit

Mid-Market Rates

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The information provided in this daily market update is for informational purposes only and should not be considered as financial advice. Trading Forex and CFDs involves significant risk of loss and may not be suitable for all investors. Past performance is not indicative of future results. CA Markets does not guarantee the accuracy or completeness of the information provided, and we recommend consulting with a qualified financial advisor before making any trading decisions. Users are solely responsible for their own trading activities and decisions.